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La elección del sector laboral y los retornos a la educación en Guatemala
[Labour Sector Choice and the Returns to Education in Guatemala]

Author

Listed:
  • Alejos, Luis Alejandro

Abstract

This paper estimates the returns to education in Guatemala, while attempting to account for self-employment and the presence of workers without monetary earnings in the economy, factors whose omission can potentially lead to sample selection bias. The analysis uses data from the Survey of Living Conditions (ENCOVI 2000) to obtain estimates of the rate of returns to different levels of schooling using a human capital earnings function. A multinomial logit model for sector choice is implemented to correct for selection bias as in Bourguignon, Fournier and Gurgand (2001). Non-linearities in the returns to education are strongly supported by the empirical results. It is found that OLS estimates which do not account for sector choice significantly overestimate the returns to primary and early secondary schooling, while underestimating the returns to late secondary education. The results also show lower rates of return in the self-employment sector and that workers who only complete primary or early secondary schooling have a higher probability of entering this sector.

Suggested Citation

  • Alejos, Luis Alejandro, 2006. "La elección del sector laboral y los retornos a la educación en Guatemala
    [Labour Sector Choice and the Returns to Education in Guatemala]
    ," MPRA Paper 42756, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:42756
    as

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    File URL: https://mpra.ub.uni-muenchen.de/42756/1/MPRA_paper_42756.pdf
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    References listed on IDEAS

    as
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    2. Bennell, Paul, 1996. "Rates of return to education: Does the conventional pattern prevail in sub-Saharan Africa?," World Development, Elsevier, vol. 24(1), pages 183-199, January.
    3. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters,in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
    4. Dorothe Bonjour & Lynn F. Cherkas & Jonathan E. Haskel & Denise D. Hawkes & Tim D. Spector, 2003. "Returns to Education: Evidence from U.K. Twins," American Economic Review, American Economic Association, vol. 93(5), pages 1799-1812, December.
    5. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
    6. Tsung-Ping Chung, 2000. "The Returns to Education and Training: Evidence from the Malaysian Family Life Surveys," Studies in Economics 0007, School of Economics, University of Kent.
    7. Williams, Donald R., 2002. "Returns to education and experience in self-employment: Evidence from Germany," IRISS Working Paper Series 2002-04, IRISS at CEPS/INSTEAD.
    8. James J. Heckman & Lance J. Lochner & Petra E. Todd, 2003. "Fifty Years of Mincer Earnings Regressions," NBER Working Papers 9732, National Bureau of Economic Research, Inc.
    9. Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, vol. 51(2), pages 507-512, March.
    10. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    11. Gaston, Noel & Tenjo, Jaime, 1992. "Educational Attainment and Earnings Determination in Colombia," Economic Development and Cultural Change, University of Chicago Press, vol. 41(1), pages 125-139, October.
    12. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281-281.
    13. Harry Anthony Patrinos, 1996. "Non-linearities in the returns to education: sheepskin effects or threshold levels of human capital?," Applied Economics Letters, Taylor & Francis Journals, vol. 3(3), pages 171-173.
    14. Ashenfelter, Orley & Krueger, Alan B, 1994. "Estimates of the Economic Returns to Schooling from a New Sample of Twins," American Economic Review, American Economic Association, vol. 84(5), pages 1157-1173, December.
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    More about this item

    Keywords

    returns to education; self-employment; unpaid work;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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